He said its system was secure and that "the unavailability of this technology is a real missed opportunity for teachers and school districts seeking to improve student learning."

But parents and school administrators, both in New York and other states, were increasingly skeptical of inBloom. Under heavy criticism regarding student privacy, the group lost support in the past year as states pulled out or shelved data-sharing plans. New York was one of the final holdouts.

The state budget, adopted earlier this month, included a provision that New York "halt its relationship with inBloom and consider alternative paths to accomplish the goals of increased data transparency and analytics."

Roger Tilles, Long Island's representative on the state Board of Regents, said he wasn't surprised by the announcement; New York was crucial to inBloom's survival.

He said it failed because its system was "untested and unproven" and because safeguards "weren't clear to everybody -- or anybody."

He said, too, that inBloom was a distraction from the rollout of the Common Core academic standards, adopted by New York, 43 other states and the District of Columbia.

President Barack Obama's Race To The Top education initiative, which awarded New York $700 million, is heavily reliant upon data and statistics for teacher and student achievement.

"Hopefully, someday, we can track children from preschool to high school and from high school to college and college to career," U.S. Education Secretary Arne Duncan said in a June 2009 speech.Jonathan Burman, a spokesman for the state Department of Education, said Monday, "We will continue to explore and pursue alternate paths that help our schools, districts, and BOCES access secure and cost-effective educational technology tools that empower and support our teachers, students, and their families. As required by statute, we directed inBloom to delete all New York data."

InBloom had said student information would be used only to help tailor each child's education. Critics were unsure why the data was being collected and how it might be used. Student disciplinary records were among parents' greatest concerns.

"This will finally put to rest what had become a huge distraction for parents, educators and school boards across New York," said Herricks Superintendent Jack Bierwirth, who co-chairs a subcommittee on tests for the New York State Council of School Superintendents. "New York was the only state left in what was supposed to be a national program."

Jessica Leavey, mother of a second-grader in the Connetquot school district, said she was worried about how the data would come to be used, concerned it would pop up later in her daughter's life in unexpected ways.

If inBloom's database had been implemented, she said, she would have sought to keep her child's information out of the system.

The group -- which employs 35 people, mostly in information technology -- will shutter in a matter of months. It was funded by $100 million from the Gates Foundation and the Carnegie Corporation of New York.

"I'm glad to see inBloom go away," Rockville Centre Superintendent Bill Johnson said. But it's worth exploring how technology can be used to improve instruction, he said, adding, "I think this was just the wrong way to pursue it."

Leonie Haimson, founder and executive director of Class Size Matters, a nonprofit education advocacy group based in Manhattan, has been warning parents and educators about threats to student privacy for years. She said inBloom was particularly troublesome, in part because of the huge amount of data it was to collect.